Royal Dutch Shell (England and Wales) contributed the most to the increase in upstream (oil and gas production) costs incurred[1](a good proxy for upstream capital expenditures) by FDI affiliates in the United States in 2006 (see table below). A major part of their contribution was the beginning of construction of major components of the Perdido Regional Development Host facility in the ultra-deep waters of the Gulf of Mexico. This complex is planned to be a spar floating production platform with full drill, complete, and intervention capability and will be used to develop the Great White, Tobago and Silvertip fields in the Gulf. The increases in costs incurred recorded by BP and Nexen (Canada) were attributed most importantly to increased expenditures for development activities, while those at Total to unproved property acquisitions.
The apparent decline in downstream (refining and marketing) capital expenditures reported by FDI affiliates in 2006 is misleading because it is more than accounted for by the fact that Petróleos de Venezuela stopped publicly reporting downstream capital expenditures that year (see table below). In fact, three of the four reporting refiners increased downstream capital expenditures, with BP increasing its expenditures in part because it continued making investments in response to the 2005 accident at its Texas City, Texas refinery. Further, the company reported that it will increase spending in the United States to an average of $1.7 billion a year over the period from 2007 through 2010 to improve the integrity and reliability of its U.S. refining assets. In addition Delek (Israel) completed two capital projects at its refinery in Tyler, Texas that allowed it to produce all of its diesel output as ultra-low-sulfur diesel fuel and provided more reliable sulfur-handling capabilities.
Upstream Costs Incurred and Downstream Capital Expenditures by
FDI-Affiliate Oil and Natural Gas Companies
in the United States, 2005 and 2006
(Million Dollars)
Foreign Parent (Country)
Upstream
Costs Incurreda
Downstream Capital
Expendituresb
2005
2006
2005
- 2006 Percent Change
2005
2006
2005
- 2006 Percent Change
BP (England & Wales)
3,600
4,491
24.8
1,226
1,339
9.2
Royal Dutch Shell (England & Wales)c
1,396
2,555
83.0
449
419
-6.7
EnCana (Canada)
2,400
2,346
-2.3
0
0
0.0
BHP Billiton (Australia)d
963
935
-2.9
0
0
0.0
Total (France)e
R494
843
70.6
-
-
- -
Nexen (Canada)
356
586
64.6
0
0
0.0
Delek (Israel)
0
0
0.0
R29
98
233.9
Alon Israel Oilf
0
0
0.0
R35
44
25.9
Petróleos de Venezuela
0
0
0.0
E515
-
- -
Total
R9,209
11,756
27.7
R2,254
1,899
-15.7
aUpstream
costs incurred in oil and natural gas property acquisition, exploration, and
development activities.
bCapital
expenditures in petroleum refining and marketing.
cDoes not
include Royal Dutch Shell's capital expenditures at facilities jointly owned
with Saudi Aramco (Saudi Arabia) and Petróleos Mexicanos (Mexico) or
facilities operated by its chemicals division.
dFor years
ending June 30.Includes costs
incurred in South America.
eIncludes
costs incurred in Canada.
fIncludes
capital expenditures for asphalt and retail segments and for chemical
catalysts and turnarounds.Alon's
capital expenditures were $24 million in 2003 and $29 million in 2004.
Notes:- = No data reported.- - = Not
applicable.E = Estimated.NM = Not meaningful.R = Revised data.** = Number less than 0.5 rounded to
zero.Calculations performed with
unrounded data.
Sources:Company documents.
[1] Includes
costs incurred in oil and gas property acquisition, exploration, and
development.